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5 Things You Shouldn’t Do with Money in College

Your loan instalment just came in, and it feels like you’ve got $5K in the bank just waiting to be spent…. except that’s nowhere near true. And even if it’s hard-earned paycheque money, it still deserves to be treated with respect and restraint. You are limited in cash usually when in college, so you need to be preserving your funds by ensuring you aren’t squandering your money.

bad money decisions

Not sure where to start? Here are five things you shouldn’t do with money in college:

1. Open a credit card in exchange for something free

It doesn’t matter what it is. That burrito, t-shirt, pizza, or foam finger will end up costing you in the end, so don’t give your personal information and signature away to open a credit card.

2. Loan a friend money

Help your friend throw a fundraiser carwash, help them get a job, or help them create a stronger budget, but don’t loan your friend a significant amount of money. Not only does your friend not know the future (AKA whether he’ll find a job or have to move away), but you also don’t. Even if you’re flush with cash now (haha), there’s no telling if you’ll need your own resources in the future. This goes for co-signing on any kind of loan, too!

3. Sign a lease without a roommate agreement

You’re best friends now. But then, suddenly, your roommate starts chain smoking and inviting strangers to “stay a few nights” on the couch. And let’s not even get started with the mess in the kitchen! Before you sign a lease, sit down with your prospective roommates to make sure you agree on visitor, the date the rent is due, and what to do in the event of an argument or disagreement. You’ll be glad you did.

4. Spend it on just about anything

This might sound harsh, but anything within your price range in college is probably not worth purchasing. Stick to thrift shops, college outfitter stores, and yard sales for the necessities like furniture and kitchen supplies.

Luckily, it’s far easier to be frugal as a student than it is when you are out of school, as I have demonstrated in this post.

4. Gamble or invest with student loans

Hopefully this isn’t even on your radar, but if you think gambling or investing with student loans is a good idea, think again. In fact, this is downright illegal, depending on the conditions of your loan! It’s not worth the risk, both legally, and in the event of a major loss.

Have you made any of these mistakes? What would you say to someone in your position?

I opened up a few credit cards in college for free stuff. One was a t shirt and the other was a plastic cup with the Pittsburgh Pirates logo on it. At the time, I didn’t think anything of it. But in hindsight I was an idiot. I never got the credit cards – I guess I was denied – but I could have gotten myself into some serious financial trouble had I been approved.

I agree, those are all bad mistakes. It’s been a while since my college days, but I recall people doing all of those things. Thankfully I avoided such traps. The credit card for something free exchange seemed to get a lot of people who simply didn’t have the foresight to understand what was really going on there.